UK saving rates at record low

As the Bank of England continues to make policy adjustments driven by the need to guide the economy out of recession, the saving rates in January have now dropped to a record low with notice accounts now paying on average just 0.29 percent interest.

According to the latest data by the Bank of England, the returns on instant access and notice accounts, tax-free ISAs and bonds are all at their lowest since records began back in 1995.

On the other hand it is the variable rate and tracker mortgage customers that have been in a position to benefit most for the fall in the official interest rate, as mortgage interest rates on both variable and tracker mortgages are at an all time low.

The current interest rate return is approximately 10 percent of the November and December rates of 2008.

In general, though, mortgage rates still remain fairly high, however a third way is the use of offset mortgages which work by offsetting savings against the mortgage leaving borrowers only having to pay interest on the remaining balance.

The savings on an offset mortgage mean you will be able to pay off your mortgage far quicker, as well as still having the luxury of readily available savings.

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